The Economic Research Center of the University of Cyprus presented a series of recommendations for possible tax reform that includes the following proposals:
- Strengthening the tax residency criteria for companies based on control and management
- Implementation of a framework for intangible assets (IP Box)
- Repeal of the deemed dividend distribution regime and implementation of a 5% withholding tax on actual dividend distributions for Cyprus tax residents who are also domiciled in Cyprus
- Increase in the corporate tax rate from 12.5% to 15%
- Measures against "closely held companies"
- Super deductions for expenses/depreciation, accelerated depreciation, and deductions for skill upgrades and employee retraining for green transition and digital transformation
Τhe recommendations are subject to further consultations with stakeholders, and any changes will only be implemented after the approval of the relevant bills by Parliament.
Read a March 2025 report prepared by the KPMG member firm in Cyprus